Monday, September 29, 2008

Do You Send Client Satisfaction Surveys?

Do you regularly send out client satisfaction surveys after you sell a property? At Rulnick Realty, in Destin Florida, we do. Our questionnaire is pretty simple. We ask:

What did Agent Jones or Rulnick Realty do well, that should be continued?What could be done to improve the real estate purchase or sale experience?I find that open-ended responses generate the best feedback. If the comments are especially good, we'll ask to include it in our advertising. The bottom of letter says:

Please sign here if your response may be used in advertising or promotional materials_______________Today I was thrilled to receive a survey back with a letter attached. One of my agents. Rhonda Therrien, had sold a house to this particular seller, and worked with him in the past. Here's what he said:

Dear Wendy,

Rhonda has handled several property transactions for me. We go way back. Let me tell you a little story about her. She was trying to sell a couple a condo and they were actually look for two at the time. One for them and one close for her sister. My condo was one they were looking at. As we came out the door after looking at mine, there came a major downpour like can happen in Fort Walton Beach. Rhonda didn't hesitate for a minute. She waded in ankle deep rainwater in her high heels and stockings, in the rain, and went to her car and got a big umbrella out of her trunk, and came back to usher her clients back to their car all dry and comfortable. Needless to say, she made two sales that day. One for me and one for a neighbor next door.Rhonda is the best. You are luck to have her.

Sunday, September 28, 2008

Short Sales: What's The Hardship?

What are the hardships behind so many Short Sales? We've heard a few reasons on the news lately about why so many people can no longer afford their mortgage payments. We've heard mainly "Not qualified to buy the home in the first place" " Rate re-set to higher payment" "Scammed into getting mortgage". Well, in my area on the Emerald Coast of Florida, that's not what I am finding from my Short Sale sellers. I did a quick study of 61 active or recently sold Short Sales from Destin and Santa Rosa Beach to Navarre, Crestview and Fort Walton Beach FL. Here are the summarized hardships:

Loss of Income: 51

Job Transfer: 4

Medical: 3

Divorce: 2

Fraud: 1

Most of my sellers lost their jobs. Or they lost significant income due to the economy. I have sellers who were in construction, building residential homes, laying tile. They have little work. I have salespeople, from real estate to cars, who can no longer make it. Some of the sellers had a combination of income loss and medical bills. Several of them have been forced to move out of the area to find work. A few are military, with no choice but to relocate when the Air Force orders them. Should some of these sellers not have been able to quality for a mortgage? Were they over-leveraged? Perhaps, especially with so many investment properties in my area. But, overall, loss of income is the crux of the problem.

This site, Wendy Rulnick or Rulnick Realty, Inc. is not providing legal or tax advice. The information provided is for educational and informational purposes only. It is recommended that sellers considering a short sale should consult an independent legal and tax advisor for more information.
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Saturday, September 27, 2008

Short Sales? Don't Ask Whitney Bank

I have Short Sale lot listing in Santa Rosa Beach, Florida. Values in that market area have dropped 50% for vacant land. There is about a ten-year inventory for sale. That means, at the current rate of sales, it would take ten years for all the lots to sell. My Short Sale seller's income has declined such that he can no longer afford mortgage payments on his land. His lender is Whitney Bank. We submitted an offer to Whitney for the full Whitney-appraised value, half of what is owed on the lot. Guess what? They will not do Short Sales. They will never forgive a deficiency. Here is a quote from Whitney Bank's letter to my seller:

-Contract Offer Response for Lot 2, Main Street
Dear Mr. Jones:
Whitney does not do short sales as satisfaction of debt. Rather, Whitney's release of the mortgage will be executed on the express condition that Whitney is reserving its rights to collect the deficiency. The net sales proceeds derived from the proposed sale of the collateral would be applied towards the outstanding loan and you would still be responsible for the balance of the loan whereby we would attempt to restructure it under a workout repayment plan acceptable to the Bank based upon receipt of current personal financial information.
Respectfully,
Special Credits Department - Central Gulf Coast RegionSo, know- if you are going down the Short Sale path with Whitney Bank, you will be liable for the entire deficiency.

Wednesday, September 24, 2008

"Short Selling" vs "Short Sales"

Yesterday I got a call from a potential "Short Sale" seller who was confused. He had heard on the news that "short selling" had been banned by the government. He thought he might not be able to save his home from foreclosure because of this new law.

I knew immediately what he had heard. In fact, the news was about "short selling" stocks on Wall Street. On September 19, the Security and Exchange Commission (SEC) did in fact suspend short selling for 799 financial companies. When my customer heard the news, he said it was followed by a story about the mortgage crisis, so he "assumed" it was related to short sales of real estate.

What is short selling of stocks? In a nutshell, it is the "borrowing" of stocks by the short seller that he thinks are overvalued, selling the "borrowed" stocks at the high price, then buying the shares back when the price drops. The profit between the high price and buy-back price is pocketed by the short seller when he returns the stocks. The SEC banned short selling of the financial companies because of the thinking that the practice causes prices to drop more quickly, which would exacerbate the current national financial crisis.

"Short Sales" in real estate are when the owner of real estate sells the property for less than what is owed on the mortgage, and the lender accepts the "short" payoff. So, rest assured, you can still "Short SELL" your house.

Saturday, September 20, 2008

Email from Potential Short Sale Seller

To: Wendy RulnickSubject: Listing Navarre House Short SaleI heard good things about you, while we lived in Florida. I did a Google search to find agents with Short Sale experience, and your name popped up. I looked at your site and decided to contact you. My husband and I talked last night and he is unsure if he wants to list the house right now. He's worried that HSBC will come after us for the outstanding loan balance, after the sale of the house. They seem to be unwilling to negotiate right now, so he wants to wait to discuss that with them. In your experience, do most lien holders usually go after the homeowner for the remaining balance?I thought my husband and I were on the same page, but he needs a little more info before we proceed. I don't want to waste your time so I will contact you after we speak to HSBC about what they will do with the loan balance.
Thank you for contacting us so fast. We will be in touch soon.

Normally with a Short Sale there is no deficiency judgment. That's the point of a Short Sale. In some cases, the lender asks for a small promissory note at 0% interest to be paid over 5-7 years. If the lender agrees to the Short Sale, you will get their approval in writing, so there's no question. A typical approval letter will read, for example, the lender "will not pursue a deficiency". If the property goes into foreclosure, however, they can pursue the full unpaid balance.

Saturday, September 13, 2008

Should We Publish Mean Spirited Comments?

I have been blogging steadily since the beginning of 2008. I have used forums on Blogger, here and other venues. It first began as a way to express opinions on the real estate market. It was and is a great outlet. Then it grew to become an educational avenue for other Realtors and the general public. I have since written about 150 posts, ranging from short sales to market statistics and occasionally off-topic commentary or stories. I have found a tremendous response from my fellow real estate bloggers and consumers, alike. On an almost daily basis, I receive phone calls and emails from Realtors and the general public from all over the country with real estate questions, usually involving today's hot topic, short sales.

Today, I noticed my local newspaper, the Northwest Florida Daily News, has a blogging platform, so I thought, "Why not give it a shot? That way, I can be more connected with the local market." I went ahead, filled out a profile, and entered my first blog, Countrywide Wants Short Sale Buyers' Social Security Numbers, one of my most recent posts. Three minutes later, I received a comment! I was excited -"What a fantastic new avenue!" I thought. Except it wasn't a nice comment. The writer said, "Thanks for the info, Wendy, but I prefer advertising on your signs." Ouch. I had a choice. Publish it or reject it. I chose to publish. And I responded, "Thank you for your feedback. I am sorry if you didn't find the information helpful. Perhaps others will." It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Search Destin Florida real estate and vicinity.Short Sale Pre Foreclosure Help.Read my Blog.

Wednesday, September 10, 2008

Countrywide Wants Short Sale Buyers' Social Security Numbers

I have two interesting short sales in process with Countrywide. One is in Destin, Florida, the other, Navarre, Florida. In both of these cases, Countrywide is asking for the buyer's date of birth and home address. In one of the cases, they want the buyer's social security number.Why does Countrywide want this new information? Apparently, in Short Sales where their loss is greater than $250,000, Countrywide does a background check on the buyer to ensure he is not related to the seller.

In one of these situations above, the buyer is refusing to provide his social security number. He feels that his privacy, identity and more would be at risk by divulging it. And it would be. I don't blame him. I have been trying to resolve this issue for three weeks. Finally, today, the negotiator called me and said the deal would be "off" if he didn't provide the information. I told her I needed more substantial explanation for the buyer, as I didn't want to waste the four months of time we already invested in the transaction. She put her team leader on the phone. He said "We do not need the social security number, just the date of birth." He also said that Countrywide wanted to ensure there was "No benefit to the seller through the buyer's purchase." When the negotiator got back on the phone, she seemed flustered. I told her I provided that information to her three weeks ago, and repeated it again. She said she "would call me right back". That was two hours ago.

In any event, if Countrywide is performing background checks, they ought to disclose that to the buyer. Anything less is a bit underhanded.